CANADA FX DEBT-C$ near flat as investors brace for GDP data

Reuters Staff

3 Min Read

(Adds analyst quotes and updates prices)
* Canadian dollar at C$1.3462, or 74.28 U.S. cents
* Loonie touches weakest in nearly a week at C$1.3506
* Bond prices mixed across slightly steeper yield curve
By Fergal Smith
TORONTO, May 30 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday, recovering from
a near one-week low earlier in the session as investors awaited
the country's gross domestic product data on Wednesday.
At 4 p.m. EDT (2000 GMT), the Canadian dollar was
trading at C$1.3462 to the greenback, or 74.28 U.S. cents,
nearly unchanged.
The currency earlier moved as low as C$1.3506, its weakest
since May 24, but the range was narrow.
"It has been pretty rangebound. All eyes are on the GDP data
tomorrow," said Rahim Madhavji, president of Knightsbridge
Foreign Exchange.
Economists forecast that the Canadian economy grew at a 3.9
percent annualized pace in the first quarter after a strong
expansion in the second half of 2016 .
The currency on Thursday touched its strongest in five weeks
at C$1.3388 after the Bank of Canada struck a more upbeat tone
than investors had expected the day before.
Investors are also bracing for a potential U.S. Federal
Reserve interest rate increase in June, Madhavji said.
The U.S. dollar dipped against a basket of major
currencies even as data pointed to firming domestic demand early
in the second quarter that could allow the Fed to hike rates.
Prices of oil, one of Canada's major exports, were pressured
by signs of resurgent crude output in Libya and concerns that
extended production cuts by leading exporting countries may not
be enough to drain a global glut.
U.S. crude prices settled 14 cents lower at $49.66 a barrel.
Canada's current account deficit widened more than expected
in the first quarter of the year on an increase in imports of
both goods and services. The C$14.05 billion gap exceeded
economists' expectations for a deficit of C$12 billion.
Canadian government bond prices were mixed across a slightly
steeper yield curve, with the two-year up 1 Canadian
cent to yield 0.703 percent and the 10-year falling
5 Canadian cents to yield 1.415 percent.
On Monday, the 10-year yield had hit its lowest intraday
level in six months at 1.399 percent.
(Reporting by Fergal Smith, editing by G Crosse)